According to the writer-producer Mark Boal “hurt locker” is a military slang that means “a bad and painful place.” He said during an interview that “EOD soldiers use it as a form of poetic understatement: If an improvised explosive device, or IED, goes off while you're trying to disarm it, the ‘hurt locker’ is likely to mean a white box draped in a flag and shipped home with full military honors.”

One of the frontrunners for Best Picture in Sunday's Academy Awards ceremony is Kathryn Bigelow's tense depiction of a U.S. bomb squad unit in Iraq, The Hurt Locker. The movie's official website says of the title, "In Iraq, it is soldier vernacular to speak of explosions as sending you to 'the hurt locker."
In fact, like so much American military slang, hurt locker (along with related hurt expressions) dates back to the Vietnam War.
By Ben Zimmer

"In Iraq, it is soldier vernacular to speak of explosions as sending you to 'the hurt locker."

When you are severely hungover from a night of heavy drinking and are forced to confine yourself to your room for nearly the entire day.

'Hurt' is in reference to suffering or struggling from excessive drinking and 'locker' is in reference to being confined in a small, dark place to escape reality.

"Dude, why I haven't heard from Chris all day?" "Oh it's best you just let him be man, he's in the hurt locker right now. He'll hit you back tomorrow I'm sure."

"Come on man, come out and drink with us for the game tonight!" "Nah if I do that then I'll end up calling out of work and putting myself in the hurt locker. I have a big meeting tomorrow so I have to avoid that at all costs."